6o 



HARDWOOD RECORD 



THOMAS L. ROSS. I'UKTOKIA, GA.. RED 

 CYntESS I.UMHEIi COMPANY 



J. K. WUJ.IAMS. FAYETTEVILLE, TENX., 

 WILLIAMS LUMBER COMPANY 



IL PAEPCKE, CHICAGO. ILL., PAEPCKE- 

 LEICIIT LU-MBEK COMPANY 



that Ins linn diOn't liandle muoh lumber bought by him on which they 

 did 1101 make arouud .$lii per M. If all the millmen were properly 

 informed as to the actual obtainable price, only the fellow hard up for 

 cash would sell at a price giving any buyer a profit anything like .$10 

 per M. This would make it much easier for manufacturers who are 

 trying to get the worth of their lumber, as the thorn in the side of the 

 price-getters is uninformed millmen. A's suggested above, the price 

 named need not necessarily be a set figure, as the prices in diSferent 

 sect-ions will var.v. Show the high price that some are getting and the 

 lowest price at which any sane man is selling ; let each manufacturer 

 strive for the high price and each call himself _a "price-cutter" if he 

 sells below the lower one. 



Advertisements show-ing large amounts of lumber, whether on baud or 

 not (especially if not), are detrimental to price-getting and inducive 

 to price-cutting. Some men advertise for sale anywhere from a carload 

 to a million feet of some grades of lumber, and at the very moment they 

 are advertising these large blocks of stock they are trying to buy the 

 same grades they are advertising for sale. The consuming manufacturer, 

 not knowing that they are attempting to buy and thinking all the stock 

 offered for sale is actually on sticks, gets the wrong impression and 

 thinks that the country is full of the kind of lumber he needs in his 

 factory. Stop listing large amounts of lumber. At least don't list more 

 stock than you actually have. 



I assume that all lumber men and those connected with the lumber 

 business are striving for profit. This is the difference between the 

 whole cost of doing business and the net receipts. Many seem to forget 

 this when selling lumber. Some manufacturers, like the "trailer" referred 

 to before, sell at any price, their main idea being to sell. They seem to 

 figure, if they figure at all, only part of the cost. I know some whole- 

 salers who, when they buy a car of lumber cheap, simply add a small 

 margin to sell. Had they acted wisely they would have sold at full 

 market price, realizing two or three times as much profit. If lumber 

 costs some dealers delivered to some point $40 and they sell for $42 

 they say they have made $2 per M. or $30 on the car. They forget the 

 office expense, the traveling expense, office help, investments, insurance, 

 loss of accounts, etc., in their calculations. In figuring profit on every 

 sale there is more than one thing to consider. Each millman in selling 

 his lumber should not forget to add the following items in his cost : 



1. Stumpage ; not at the price he paid for it, if he bought it cheap, 

 but at the price it is worth today. Some men would make more money 

 selling their slumpage and pocketing the difference between the price paid 

 for and what it is worth today than they will make by putting the timber 

 through their mill. 



2. The interest the money invested in timber, mills, railroads, etc., 

 would bring if loaned out and secured by gilt-edged security. 



Z. Annual depreciation of mills, houses, lumber, etc. 



4. Labor cost per thousand in the production of lumber. 



5. Ixiss because of had accounts which every man selling lumber will 

 sustain. 



0. The probability of loss of mills, houses and olber property by 

 fire. 



7. Fixed or overhead charges, such as salaries of general men. adver- 

 tising, taxes, insurance, rent, general expense, stationery and supplies, 

 postage, rights of way, cruising, timber tracts, some of which you may 

 not buy, and innumerable other items which I might continue to name. 



The trouble with many of us, when making a sale and figuring profit, is 

 that we are too likely to forget some of the above and other charges 

 w^hich go to make up tiie actual cost. 



If you are not making six per cent interest on the money you have 

 invested, plus your salary, plus enough additional profit to more than 

 guarantee your possible losses by fire, failures, etc., sell out. Go to work 

 on a salary, invest your money in good securities, avoid worry about 

 possible loss, be happy yourself and make the price-getting dealer happy 

 also. 



Mixing Gr.u>es 



The mixing of grades by manufacturers for any purpose is detrimen- 

 tal to the best interests of the lumber manufacturing business, and I 

 presume will continue until all uianufacturers will agree to refuse to sell 

 a car containing mixed grades. Such an agreement as this, made by all 

 lumber manufacturers, would not only help them financially, but the 

 consumers of lumlier as well. Both should hail the day when an agree- 

 ment of this kind is consummated. 



Tkrms of S.ILE 



The question of terms of sale is a difficult problem to solve. I hope 

 Ibis (►uestion will be so thoroughly and profitably discussed at the Sales 

 Managers' meeting, which is to be held in Chicago the coming month, 

 that something like a uniform set of terms will be used by each ship- 

 per. The more concessions a firm or salesman makes in the way of 

 terms to buyers the farther away from a uniform set of terms we will 

 be. If a buyer purchases lumber from one firm on ninety days' time 

 today, he will want, and probably will got. four months from another 

 tomorrow. There must be a halt called somewhere, and the sooner it is 

 cTlled the better. 



Complaints 



The question of complaint on shipments is another difficult problem. 

 A salesman is not the best person to adjust a complaint. He, as the 

 phrase goes, is "Iietweon the devil and the deep blue sea." His house pays 

 him his salary and he wants to treat them fairly. His cu.stomer is the 

 one who gives him his business, and without the business he could not 

 hope to continue drawing his salary. He will therefore lean towards 

 his customer in making a settlement. If ho does not, he is an exception 

 to the rule. Little differences can be settled easily by correspondence; 

 large ones are better settled through a third party. It is hardly fair 

 to a salesman to compel hiii] to take stands against his customer, as he 

 frequently must do, in making adjustments and then expect him to get 

 further business from that same customer. 

 FitEionT Rates 



The question of freiglit rates and railroad claims is one that I be- 

 lieve receives too little attention from most lumber manufacturers. Large 

 firms have their traffic managers and watch this feature of the busi- 

 ness closely. No lumber manufacturer, however small he may be, should 

 fail to check closely each of his expense bills to see whether or not he 

 lias been overcharged in either rate or weight on lumber. A carefully 

 compiled list of freight rates from mills to points in each salesman's 

 territory is not only essential to the salesman, but for use in checking 

 freight charges as well. There are many dollars to be saved by each 

 manufacturer if he will watch the qtiestion of rates and claims closely. 



CONTKACTS 



I don't want to close this paper without expressing my opinion about 

 contracts. I don't think much of contract sales. I do not mean by 



